Photo-sharing platform Snapchat is set to terminate jobs of employees and is in early stages of planning layoffs, according to a news report in The Verge.
The job cuts at Snap are coming after the company posted disastrous quarterly results (Q2) amid poor future forecast.
Snapchat reported revenue of $1.111 billion (+13 percent) in Q2 2022 and net loss of $422 million vs $152 million in the prior year.
“While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect our ambition,” said Snapchat CEO Evan Spiegel. “We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth.”
It’s currently unclear how many of Snap’s more than 6,000 employees will be laid off, as managers across the company are still planning the full scope of the cuts for their teams.
Snap, the parent company of Snapchat, suffered nearly $10 billion loss and its shares hit a new 52-week low over disappointing quarterly results last month.
“We face a number of very large and very sophisticated competitors and we’re seeing the advertising pie grow at a slower rate amid the macro headwinds,” Snapchat CFO Derek Anderson had told investors.
In May, Snap announced it will slow down hiring this year.
CEO Evan Spiegel told employees that the company plans to hire 500 people this year, versus 2,000 it hired over the past 12 months, after warning investors that its revenue wouldn’t grow as fast as expected.
Snap faces rising inflation and interest rates, supply chain shortages and labour disruptions, platform policy changes, the impact of the war in Ukraine, and more.